Conflicting Broker Advice... help!

Albert_FTB

Our 2 year fixed deal ends at the end of January, so I've been asking brokers about our options...

Two have said wait and see as they think fixed rates will likely come down before our deal is up, and the other two are encouraging us to grab the best fixed we can at the moment as obviously deals are being withdrawn every day.

We bought a new build 2 years ago for £130k, there is currently £121k left on the mortgage to be paid off within 28 years. I am sceptical whether the property will be worth much more than what we paid for it, and as it stands we would need a valuation of £135k to get under 90% LTV (though if we get knocked back due to the valuation being too low it seems we won't lose out in any way).

Our options at the moment seem to be apply for a fixed rate now based on a (fingers crossed) £135k valuation coming back, or stick it out a bit and see what happens, which is the dilemma!

We currently pay £700/month (5.45%), increasing to £825/month on the existing lenders SVR (7%), which we won't have any trouble paying as long as it doesn't increase dramatically.

Does anyone have any thoughts on this? It seems we are stuck between a rock and a hard place and it's making my head hurt!

Any thoughts much appreciated.

olly300

No one has a crystal ball. Unfortunately you need to decide what to do yourself.

What fixed rate deals have you found? Lots of fixed rates are now near the SVR due to the banking problems.

dunstonh

most deals cannot be applied for until you are within 3 months of the end of your tie in. End of Jan is too early for that.

feisty1

Does your existing lender not have a rate to offer you when this one expires (other than SVR)

dwsjarcmcd

I have to say that I think that there is virtually no chance of you valuation coming in above the original purchase price. 2 year old houses are still classed as 'new builds' by many lenders.

Out of interest are these brokers all saying for you to go for the same term of fixed rates?

Tiddler_2

May I ask who your current mortgage is with? You quote an SVR of 7% so it could be the Halifax who would let you book a new deal from 26th Oct to start on 1st Feb

My suggestion would be to look at applying for a deal asap. The end of Jan is only just 4 months away and whilst BoE rate may come down, this does not necessarily mean that the fixed rates available will come down.

If you apply for a deal now and it is not offered until early November, then you will be within the 3 month offer period that most lenders give. You can delay the offer being issued through not providing salary slips or delaying a valuation by "being on holiday" if the valuer needs to gain access to the property (the deal is booked on application in the majority of cases) However I would look for a deal with no upfront fees, so that should deals go down you could change deals and not lose anything.

If you find a good whole of market broker they will look at these sorts of options for you.

Albert_FTB

The 2 deals we are looking at are 6.43% fixed for 2 years with a £600 arrangement fee, and a 6.83% fixed for 2 years with no arrangement fee.

Don't know what fixed rates our existing lender (Accord) would offer us as they only look within 90 days.

The two deals mentioned are with another company (very possibly NAtionawide though I'm not 100%) and these are through L+C who say we can apply for those now.

In terms of us looking at 2 years fixed... my wife is Canadian so at some point we would be moving over there, that's basically why. I suppose it's a good indication of the level of uncertainty that the brokers I've spoken to are split down the middle ont he best move.

luckyfool

The brokers on here don't seem to be split down the middle . . . i.e. that you have a vanishingly small chance of getting the valuation to stack up for 90% with a move to a new lender, and that your best bet is to wait it out and either pay SVR or switch to a new deal with Accord.

KEY POINT - Accord will let you book a product right now! They will allow an application up to 120 days prior to your deal ending. I don't know why your broker didn't look at this option for you, I wouldn't want to speculate. I do know that Accord only pay a reduced proc fee to the broker for product transfers . . . or none at all if it goes on a 90+% product.

To access these deals you should speak to a good broker, the guys who originally set up your mortgage for you, or if necessary Accord will deal with you directly (though they are reluctant to do this).

If the Accord Indexed valuation of your property stacks up for 90% borrowing then you can get

6.49% fee free or 6.09% with a £995 arrangement fee for 2 yr fixed rate
If it means 95% is needed then :
6.79% 2 yr fixed rate fee free.
100% needed - you can still get 6.99% fixed for 2 yrs fee free.

Whether you go with that will depend on your circumstances, if you can afford to tough it out then the SVR may well drop below that over the next year or so. Either way they are still better than any 95% remortgage deal you will get out in the market from anyone else.

luckyfool

heh, just noticed, your broker is recommending that you leave Accord for another lender, to get a worse product than you can get from your current lender Accord.

Thats what I call some interesting advice. I'd be interested in hearing their rationale for that.

Ian_Griffiths_Halifax

luckyfool wrote: »

heh, just noticed, your broker is recommending that you leave Accord for another lender, to get a worse product than you can get from your current lender Accord.

Thats what I call some interesting advice. I'd be interested in hearing their rationale for that.

Either the lack of experience or the commission.

Albert_FTB

I've just spoken with Accord and they say that they 'estimate' the property to have a value of £125k, which means we could only go on the 6.99%.

Could I just clarify... you say that staying on the SVR of 7% is better than any 95% deal around at the moment?